2020 has truly been a rollercoaster of a year. Like me, you may be wondering – how is it November already? You may also be looking at your flexible spending account (FSA) balance and thinking – “wow, there’s still a lot left in there” – because (hopefully) you weren’t hit with as many illnesses as years’ past due to taking the proper coronavirus precautions.
While FSAs are valuable, tax-saving tools that can be used to pay for medical and health-related expenses, if the money you have put into the account is not used by December 31, you may lose it. Even if your FSA is set up to allow a $500 carryover or an extended grace period (log in and check your FSA plan specifics to find out), now’s the time to take a look at your balance, figure out how to use it, and plan for the year ahead.
Over the years, the IRS has added many items to the list of qualified expenses – some you may not even know about. So if you need some creative ideas for how to spend your FSA money, we can help you get started. Please remember: The suggestions below are commonly accepted as qualified expenses for general purpose FSAs. If you have a limited purpose FSA, your list of eligible expenses may be more restricted. Check your FSA plan specifics for exclusions and coverage.
On March 27, 2020, the CARES Act was signed into law. What does this mean for you and your FSA? You can now purchase over-the-counter medical products without a prescription from a physician, including pain relievers, cold medicine, bandages and more, retroactive to January 1, 2020.
Additionally, menstrual care and feminine hygiene products, such as tampons, pads, and cups, are now included as an eligible expense retroactive to January 1, 2020.
*You are still required to substantiate (provide proof for) purchases made using FSA funds, and merchants may still be updating their systems to reflect the eligibility of OTC and feminine hygiene items. Be sure to keep all receipts for substantiation and reimbursement purposes.
Hopefully you’ve gotten your flu shot by now, but it’s always best to be prepared for it or a cold as we head into a long stretch of winter. You can purchase humidifiers, thermometers, and disposable masks to prevent or treat illnesses for yourself and your family.
Though not for everyone, if you’ve been considering trying acupuncture, why not do so with the FSA funds you have to use up? Acupuncture is believed to help headaches, low back pain, neck pain, and more. It can also relieve discomfort associated with chemotherapy, menstrual cramps, and labor pain.
If you’re thinking about having a child – or if you’ve recently given birth – there are a host of items you can purchase or stock up on to use up your FSA dollars, including:
Did you know that you can reimburse yourself for the cost of driving yourself or a dependent to and from eligible medical, dental, and vision appointments? This also applies to bus, train, taxi, and parking expenses for eligible care. Save those receipts!
If your community water source contains low or no fluoride, getting a fluoridation treatment for yourself or your dependents could help reduce tooth decay by as much as 25 percent. For those of you out there who grind your teeth, consider asking your dentist about an occlusal guard to prevent doing so while you sleep – also a covered expense.
There’s no time like the present to kick a super unhealthy habit. Smoking cessation programs are eligible for reimbursement under your FSA.
As more and more companies switch to offering high deductible health plans, it’s important to understand which funding accounts pair with these plans. If you are considering or have enrolled in a high deductible health plan for next year, please keep the following in mind:
If you have a large amount of FSA money that you’re trying to spend as the year ends, it doesn’t mean an FSA isn’t right for you. It simply means you may need to take a closer look at your health expense estimates for the year. Consider refining your annual contribution based on purchases you made throughout the year and any expenses you know are coming up next year.
FSAs are an important part of your overall health plan package – and knowing how to use the funds you contribute is equally important. We hope these practical (and healthy!) tips will allow you to take advantage of your FSA money before the year ends.
Bonus tip! If your health plan includes Life Points®, you’ll also want to log in to cash those out before the end of the year. Life Points is a calendar year program and points reset on January 1, regardless of when your medical benefits renew. Points must be redeemed no later than 8 p.m. on December 31. CDPHP encourages you to use your points toward the purchase of health and wellness-related items.
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